Good write up about Heveagro, Mushroom distribution channel is in growing phases.
Positive news ahead (no need to worry at all) :-
-Confirmed better Sales volume ahead for both RTA & Particleboard in 2H. Factories very bz.. bz.. running at full capacity..
-Q3 will return to profit for both segment. I foresee Mushroom segment will still in red due to marketing spending to increase distribution channel. Let wait & see whether Q4 can turn into profit segment or not.
Next be patient and wait for recovery of ASP and increasing orders from - US, Japan, South Korea, China & Others market.
Apparently Hevea is still in cheap valuation as compared to its peer likes Vs Mieco due to its solid Balance Sheet & consistent dividend distribution. Not to mentioned Liihen, Poh Huat, Homeriz is already flying sky high to its previous valuation.
Positive news to Hevea :
- ParticleBoard segment will benefit from ASP hike & lower material price to lift margin - RTA segment will benefit from increasing demand of Home Office Furniture (work from home) due to Zombie Virus - Orders visibility remains good through to 1Q21
Hopefully Q3 result will exceed market expectations.
Expect valuation to rerate after Q3, PB x 1.0 is a matter of time due to strong earnings visibility until next year.
ParticleBoard ASP hike 20-30% in Q4 certainly a big boost to ParticleBoard segment and recalled my earlier sharing in August :
Under amendment List Of P.U. look for P.U. (A) 231/2020.
Effective 17th October prohibition of import from All Countries for ParticleBoard/ChipBoard & FibreBoard.
#If M'sia custom start to enforce 100% above prohibition and completely not allow any import to local market. Then I believe the ASP will continue to remain strong in FY2021 and likely will continue to increase again due to strong demand of M'sia furniture especially coming from market abroad.
Short-term valuation PB x 1.0 = 74c due to strong orders from both ParticleBoard and RTA segments.
Market turnaround will continue to benefit Hevea for both PB & RTA segment. Local plus Export Sales will continue to keep Hevea Bz..bz...
Q4 can expect exploded contribution from PB segment since ASP improved by another 20-30% and couple with increased in Plant utilization at 80-90% in which higher than Q3 at 70%.
My next short-term valuation before next Q4 result :
PB (0.74) x 1.30 = 96 cents, no surprise if it break RM1.00
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
1million
864 posts
Posted by 1million > 2020-10-07 22:32 |
Post removed.Why?